Loan Programs With Little or No Down Payment

Often borrowers don't have 20 percent to use as a down payment on a home purchase.  There are several different options instead of the traditional loan program with PMI(Private Mortgage Insurance).

• Federal Housing Administration (FHA) mortgage loans
  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low to moderate-income buyers get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling homebuyers who might not qualify for a typical loan, to obtain a mortgage. Interest rates for an FHA loan are typically the market interest rate, but the down payment amounts with an FHA loan will be lower than those of conventional loans. Closing costs can be included in the mortgage, and the down payment may be as low as 3 percent of the total.
• VA mortgage loans
  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterans and service people. This special loan does not require a down payment, has limited closing costs, and provides a competitive interest rate. Even though the VA does not provide the loans, it does issue a certificate of eligibility to qualify for a VA loan.
• Piggy-back loans
  You may finance a down payment with a second mortgage that closes with the first. Generally the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. Instead of the usual 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.
• Carry-Back loans
  In the option of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. In this scenario, you would borrow the largest portion of the purchase price from a traditional mortgage lender and borrow the remaining amount from the seller. Typically, this kind of second mortgage will have a higher rate of interest.

Call Joe Costa at San Diego's Park Place Financial Group today to find out about all of your options.